Fair shake for disadvantaged businesses urged as New Orleans schools are rebuilt

Almost seven years into a historic drive to rebuild schools in New Orleans, education officials have begun putting teeth into efforts aimed at hiring more disadvantaged businesses to do the work, hoping to bring in more small local contractors owned by women and minorities. With more than $1 billion in contracts left to bid out, the state-run Recovery School District said Monday that it will put a new disadvantaged business enterprise, or DBE, program in place, requiring contractors to make a good-faith effort to ensure as much as 25 percent of all construction work is handled by disadvantaged companies.

View full sizeDinah Rogers, Times-Picayune archiveIn August 2011, Hynes Elementary School in Lakeview was being rebuilt. A new disadvantaged business enterprise program at the Recovery School District will require contractors to make a good-faith effort to ensure as much as 25 percent of all construction work is handled by disadvantaged companies.

Though it is still working out the specifics, the Orleans Parish School Board, which has joint oversight with the Recovery School District over the master plan for school construction, is getting ready to vote on a more ambitious goal of 35 percent, in line with City Hall's target for contract spending. The board had a long-standing DBE program, but it fell by the wayside in the wholesale reorganization that followed Hurricane Katrina.

"What this means," said Musheer Robinson, the economic development chairman for the Louisiana National Association for the Advancement of Colored People, "is that some of the shouting and screaming and jumping up and down that some of us have been doing behind the scenes must be resonating with someone's sense of integrity."

Given the roughly $1.8 billion in federal money flowing into the city from the Federal Emergency Management Agency to rebuild and repair schools, Robinson cast the decision as a boon for not only the city's disadvantaged firms but also for the regional economy as a whole.

"If Louisiana is going to attract international investors -- the people who have money -- they cannot come here and see a bunch of alienated, destitute people," Robinson said. "If all they read about is people shooting each other, they're not going to invest here."

Still, it may be hard to measure progress. Recovery District spokeswoman Kizzy Payton said the agency doesn't yet have reliable statistics to provide a baseline for how many dollars are already going to disadvantaged businesses.

Also, any new policies aimed at giving disadvantaged companies a greater foothold in the local economy will have to contend with legal and logistical complications that DBE programs in New Orleans and around the country have faced for decades.

Officials must toe a delicate line, avoiding any explicit favoritism for one race or gender while also heeding public contracting laws that require public agencies to go with the lowest bidder.

Efforts to protect the local school district from lawsuits over its new DBE program sparked a tense back-and-forth last week among members of the Orleans Parish School Board.

The board, which was left with about 17 schools after the state took over most of the district following Katrina, still has more than $100 million worth of construction contracts to sign, according to incoming interim Superintendent Stan Smith. Members signed off on a two-paragraph DBE policy last year, but have run into disagreements over the details of a more fleshed-out version.

The issue boils down to whether the district can exclude contractors from the bidding process if they don't show a good faith effort to make sure that 35 percent of the work will be done by disadvantaged companies. William Aaron, the board's legal consultant on the matter, assured board members that their policy could withstand a legal challenge.

A four-member majority voted to put off a vote on the new policy anyway, still not convinced that it would stand up in court. Board Vice President Lourdes Moran concluded flatly, "It's illegal."

Moran said she expects the board to approve different language in July. She argues that the Recovery District's approach may be on a better legal footing.

Rather than take noncompliant contractors out of the bidding, the Recovery School District plans to insert language in all of its construction contracts that would allow it to fine contractors as much as $3,000 a day if they don't meet the district's 25 percent DBE goal or prove a good-faith effort. Sombra Williams, who will head the Recovery School District's program, said fines -- most likely enforced by withholding payment -- would be a last resort after contractors are given notice and then a hearing.

Still, Nolan Rollins, president of the Urban League of Greater New Orleans, said he expects lawsuits over the Recovery School District's policy. Rollins said the League has already reached out to the New Orleans Business Council to try and build support for the program and soften any resistance.

"I'm confident that this is the first step in the right direction," Rollins said. "Now that we see the RSD with the will to do this, the conversation has to go to the private sector. The next part is really continuing to build the business coalition to make sure money stays in New Orleans and Louisiana. We have to be unapologetic about that."

Rollins added, "This will not be the panacea that stabilizes our economy, but it's going to help. If we're serious about reducing crime, we need to create business opportunities. If we're serious about wanting to keep people in New Orleans, we need to be serious about business."